Oregon foreclosure question

[Jeff Caravalho]

Hi BP, I have a foreclosure in Oregon that I need some advice on. Property is in Oregon, worth about 280k, 1st mortgage is around 190K, second is around 100K, (repairs are done). Story from homeowners (who are friends of mine) is that it was a rental, tenants did some damage to house and they could not afford to repair & pay mortgage at same time after tenant was booted. Bank said it was going to would work with them, then said bank changed their mind and now won't work with them. Goes to auction/ sheriff sale in 2-3 weeks. They told me about it because they new I was into REI, and did not want some stranger to get it (once again these are friends of mine). They received a "BARGAIN AND SALE DEED" from an investor stating the owner would convey everything (Grantors rights, title and interest including O.R.S. Chapter 18...)to the investor in exchange for a small fee. This form also has a section called "Oregon State Disclosure, for all Real Property" listing a bunch of sections that should be reviewed before signing. They think it has something to do with the owners being able to come back and buy the property for up to 6 months. In a nutshell they are furiuos at the bank and want someone they know to get equity they lost, not bank.

Between my HELOC, cash laying around, and 50k loan from solo401K, I can cover it. My questions are how do I approach the bank to make an offer before the auction? Also, How much should that offer be? Should it be the amount of the first? How much time do I have to get an offer in before the auction? Thanks.

[Jay Hinrichs]

@Wayne Brooks  whats happening here is a foreclosure buying company ( probably one of my buddies :)))  is trying to get the owner to deed them the property pre foreclosure sale.. by doing that they then control the redemption rights.. Most bidders now will NOT bid if they don't control the redemption rights.. and or they grab them then hold them hostage for a fee if someone bids on it.

this house if what is described is accurate someone will bid the first most likely with or without the redemption rights.

Where it gets sticky for this person who wants to buy it from his buddy.. is that if he goes the redemption route the junior liens re attach.. and there is no equity.

Best play here for the OP is to encourage the owner NOT to sell his redemption rights.. the OP gets the cash together to bid the first.. with a pretty good chance there will be little to no competition you might have someone bid minimum but they won't get aggressive with out the redemption rights in their pocket.

And of course its a little more complicated and too detailed for a BP post.. but that's the gist of it.